I’m pleased to write about findings of the recent Morgan Stanley Wealth Management Investor Pulse Poll. A new poll shows that Denver area investors with at least $100,000 in investable assets are optimistic about the prospects for their portfolios, growth of the Colorado, U.S. and global economies, and their ability to reach their personal financial goals. This column highlights the sentiment of the polled investors, which was shared in a Morgan Stanley press release issued on April 22.
- 83% expect their investment portfolio to be “better” or “the same” at year-end and an equal amount believe their financial well-being will be the same or better. A similar number expects Colorado’s economy to be the same or better (82%), whereas Americans as a whole are slightly less bullish toward their states’ economies (77%).
- Apart from improvements in the Colorado economy in 2013, majorities see improvement in the global economy (71%) and US economy (65%) as well.
- 82% are confident they will achieve their long-term financial goals, and 79% of those not yet retired are confident they are on track in their planning.
Domestic economy and foreign conflict top concerns of Denver investors
When asked about their concerns, 91% cite macro issues such the U.S. budget deficit, followed by increased foreign conflicts (87%), U.S. economic prospects (87%), the trade deficit (84%), a downgrade of U.S. sovereign debt (80%), the impact of terrorism in the U.S. (80%). Only after the macro issues are identified do Denver investors turn to micro issues such as affording quality healthcare (79%) and decreased Medicare coverage (77%).
Asset allocation favors equities;
In favor investments: Gold, other precious metals, S&P 500 index funds;
Out of favor investments: General obligation and corporate bonds, Treasuries.
Equities, including stocks, mutual funds and ETFs, make-up the single largest percentage of investors’ portfolios, at 44%. However, fixed income investments (18%) and cash (19%) represent a nearly comparable percentage when taken together. Other investments, including commodities and alternatives, round out the allocation picture, at 19%.
- Ask to identify “good” investment prospects for 2013, investors cite gold (45%) followed by other commodities and precious metals other than gold (40%), S&P 500 index funds (39%) dividend bearing stocks (38%) and funds tied to the Dow Jones Industrial Average Index (37%).
- Investors identify general municipal bonds (9%), Treasuries (16%) and corporate bonds (18%) as having the weakest “good” investment prospects, likely reflecting the current low interest rates paid by these instruments.
In favor sectors: Energy, Tech, and Natural resources
Out of favor sectors: Consumer discretionary, aerospace, industrials;
In favor countries: U.S., China, Brazil;
Out of favor countries: Russia, Middle East.
- Good investment sectors for 2013 are energy (65%), tech, (62%), and natural resources (60%). The weakest sectors are seen as consumer discretionary (11% good), aerospace (15%) and industrials (19%).
- Of the various types of energy investments, oil and gas are most popular among Denver HNW investors (26% have invested in oil and gas in the past and 30% plan to do so in the future).
- Denver investors show relatively little interest in tourism (23% “good” investment prospects); with just 7% saying they are looking to invest in Colorado’s tourism industry by investing in resort areas.
- Countries identified as “good” places to invest are the U.S. (55%), China (44%), Brazil (41%) and India (37%). Far fewer see the Middle East (7%) or Russia (6%) as good places for investment.
1Survey Methodology: 1,000 US investors, age 25 to 75, with $100,000 or more in investable household financial assets. A third of those interviewed had $1 million or more in household financial assets. Poll conducted Jan. to March, 2013, by GfK Public Affairs and Corporate Communications.
Todd Hauer is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Denver. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.